KARACHI: Aimed at facilitating the SME sector, the State Bank of Pakistan (SBP) has revised the per party exposure limits for Small enterprises (SE) and Medium Enterprises (ME).

Now, Small Enterprises can avail exposure of up to Rs 100 million and Medium Enterprises can avail financing (including leased assets) of up to Rs 500 million from a single bank/DFI or from all banks and DFIs.

For per party exposure limit of SE, banks & DFIs are allowed to deduct the liquid assets (encashment value of bank deposits, certificates of deposit/investment, Pakistan Investment Bonds, Treasury Bills and National Saving Scheme Securities) held under their perfected lien for the purpose of calculation of per party exposure limit.

While, for ME’s per party exposure limit, banks & DFIs are allowed to deduct the liquid assets (encashment value of bank deposits, certificates of deposit/investment, Pakistan Investment Bonds, Treasury Bills and National Saving Scheme Securities) held under their perfected lien for the purpose of calculation of per party exposure limit. These changes are applicable with immediate effect.

Representing SMEs, the President of Federal B Area Association of Trade and Industry (FBATI) Sheikh Muhammad Tehseen has welcomed the SBP’s move saying that a low-cost financing scheme will not only give impetus to SMEs business but it will also contribute to enhancing the exports of the country.

The government through the banking regulator should introduce more long-term financing scheme at low-mark up rates besides enhancing the financing limit for SMEs to revive the sustainable production of the sector currently facing tough challenges at large for running operations due to high cost of doing business.

Tahseen pointed out that banks are currently facing liquidity issues due to low ADR ratios that could be resolved significantly through a dedicated scheme for the revival and expansion of SMEs countrywide. As soon as the output of SMEs increases, it will impact positively on exports and employment generation, he added.

He further said that the present government is working on the development of SMEs after realizing the sector potential of $40-60 billion in exports in the next 3 to 5 years, which is very much viable, however, a comprehensive export-oriented plan is required to design in collaboration with industries and their leadership.

Copyright Business Recorder, 2024